Spanish wind-power company Gamesa is pulling the plug on Virginia. Gamesa’s first offshore wind turbine prototype was planned for installation off Cape Charles, Va., but now the company says it will cite the turbine in Arinaga Quay in the Canary Islands.

Gamesa said it expects to begin installation of the G128-5.0 megawatt (MW) offshore platform at Arinaga Quay at the end of 2013 or in early 2014. The company is awaiting permits for the establishment of an offshore wind farm; the prototype will be the first of its kind to be installed in Spain.

image via Gamesa

So what soured the company on Virginia after all the high hopes? The company said “the prospects for the U.S. offshore market and its regulatory conditions in this segment so far do not justify the next step, the installation of a prototype in the U.S.” The U.S. has lagged in offshore wind, despite efforts by the Obama administration to pick up the pace, and the pending expiration of the production tax credit for wind power clearly isn’t helping matters.

Gamesa was working with Newport News Shipping on the offshore turbine at the Offshore Wind Technology Center in Virginia. Production there will wind down by the end of the year as the design of the G11X-5.0 MW offshore platform is completed.

Gamesa said it is committed to developing offshore wind projects in key markets including the U.K., Germany, France and China. The company said it will continue to monitor the U.S. offshore market as it considers how best to participate in future projects. On May 10, Gamesa announced that market complexities and new product launches increased sales but margins were compressed, and the company has a net loss of 21 million Euros. Gamesa expects the profitability of the wind turbine group to recover, especially in the second half of this year.